Global CRE Investment Outlook: H2 2026 Trends and Capital Flows

By RadCRE Research · 2026-09-28 · Market Updates

Investor confidence is gradually recovering, with transaction volumes in Seniors Housing reaching over $24B by year-end 2025 [6].

Global Investment Landscape Sees Gradual Recovery and Shifting Dynamics

The global commercial real estate (CRE) investment landscape is demonstrating signs of gradually recovering investor confidence heading into the second half of 2026, supported by evolving market conditions and strategic capital deployments. Analysis of recent trends across key regions indicates a nuanced environment with specific sector resilience and targeted investment opportunities [1].

In the UK capital markets, JLL's H2 2026 review and outlook forecasts continued momentum, driven by this recovering investor confidence and supportive policy initiatives [1]. This sentiment is echoed in specific sectors, such as Seniors Housing in the United States, where transaction volume reached just over $24 billion by year-end 2025, marking its highest level since Q2 2015 when it was $26 billion. Market sentiment in this sector has shifted towards cap rate compression, with 85% of survey respondents anticipating further decreases in cap rates over the next 12 months, a notable increase from 57% just a year prior [6]. This optimistic outlook is further underpinned by improving market conditions and strong investor confidence in the Seniors Housing sector's trajectory [6]. Occupancy rates have largely recovered to pre-pandemic levels outside major West Coast cities, averaging 89.9% in primary markets and 90% in secondary markets during Q4 2025 [6]. Supply constraints, with new construction starts declining 77% in primary markets and 62% in secondary markets from recent peaks, are also contributing to performance in this sector [6].

Retail continues to attract significant investment, particularly grocery-anchored assets. Brixmor, for instance, is expanding its grocery-anchored portfolio with a $2.3 billion REIT bet, partnering with Everview Partners to acquire Slate Grocery REIT across two portfolios [3]. In Hong Kong, a rare retail podium in Kennedy Town is being offered for sale, anchored by the district's only cinema tenant. This property, currently approximately 90% occupied, provides immediate rental income and is offered at an attractive price of approximately HKD7,200 per sq ft, highlighting the appeal of stable income-generating retail assets with strata-sales potential [4].

The office sector presents a mixed picture. In Hong Kong, Grade A office vacancy rates saw modest improvements in August, declining 0.3 percentage points month-over-month to 12.5%. While Hong Kong East experienced a 1.1 percentage point rise in vacancy rates, Tsimshatsui and Kowloon East observed modest improvements of 0.3 percentage points. The financial sector remains a key driver for Grade A office leasing demand in Hong Kong, with the education sector also contributing to expansion activity [2].

RadCRE Perspective

Majid Radaei comments, “The current market narrative, as indicated by these reports, points to a period of discerning investment. While broad market confidence is gradually returning, the focus is clearly on sectors and assets demonstrating resilient income streams, supply constraints, or specific value-add potential. The strong performance and positive outlook for Seniors Housing, coupled with targeted retail acquisitions, underscores a flight to quality and stability. Investors are seeking assets with proven occupancy and rent growth potential, or those that can be acquired at attractive pricing per square foot, such as the Kennedy Town retail podium [4, 6].”

The insights from H2 2026 suggest a strategic approach to CRE investment, favoring sectors with strong underlying fundamentals and opportunities for value creation. Whether it's the demographic-driven demand in Seniors Housing or the stability of necessity-based retail, capital flows are increasingly directed towards assets that offer both resilience and growth potential in a dynamic economic environment [1, 3, 6].

Tags: CRE investment outlook, capital markets H2 2026, seniors housing trends, retail acquisitions, Hong Kong office market